Gravita India Limited , a leading recycling company, has reported robust financial performance for the first quarter. The company's consolidated net profit jumped 39% year-over-year to ₹93.26 crore, up from ₹67.3 crore in the same quarter last year.

Revenue Growth

The company's revenue from operations saw a significant increase, rising by 15% to ₹1,037.00 crore compared to ₹907.86 crore in the corresponding quarter of the previous year. This growth in revenue indicates strong demand for Gravita's recycled products and services across its various segments.

Operational Highlights

• Achieved 12% volume growth
• EBITDA increased by 22%, maintaining healthy margins at 10.74%
• Value-added product contribution grew 47% during the quarter
• The company operates across four recycling verticals - lead, aluminium, plastic, and rubber
• Global presence spanning 12 recycling plants

Segment-wise Performance

Gravita India operates in multiple segments, with Lead and Aluminium being the primary contributors to its revenue. Here's a breakdown of the segment-wise performance:

The Lead segment continues to be the largest contributor to the company's revenue and profitability, followed by the Aluminium segment.

International Operations

• 26% of revenue came from overseas business
• 25% profit contribution from international operations
• Diversified customer base across 34 countries

Financial Metrics

• Return on invested capital (ROIC) remained strong at 28%
• Supported by the company's back-to-back hedging mechanism

Future Outlook

Gravita maintains its Vision 2029 targets:

• 25% volume CAGR
• 35% profitability growth
• 25% ROIC
• Expanding capacity to over 7 lakh tonnes per annum by FY28

Management Commentary

Yogesh Malhotra, Whole-time Director & CEO of Gravita India, commented on the results, stating, "We are pleased with our strong performance in the first quarter. The significant growth in both revenue and profitability demonstrates the resilience of our business model and the increasing demand for our recycled products. We remain focused on expanding our operations, improving operational efficiencies, and capitalizing on growth opportunities in the recycling industry."

With its strong financial performance and strategic initiatives, Gravita India is well-positioned to capitalize on the growing demand for recycled products globally. The company's diversified product portfolio and focus on sustainability are expected to drive continued growth in the coming quarters.

Shares of Gravita India Ltd (INE024L01027) are likely to be in focus following reports that the Indian government is planning to offer financial assistance for scrap processing facilities. This development could have significant implications for companies operating in the recycling and scrap processing industry.

Government's Short-Term Plan

According to a recently revealed government document, India has formulated a short-term plan to provide financial support to scrap processing facilities. This move is seen as part of the country's efforts to boost the circular economy and promote sustainable practices in waste management.

Potential Impact on Gravita India

Gravita India, a key player in the recycling industry specializing in lead recycling and manufacturing, could potentially benefit from this government initiative. The company's operations in scrap processing and recycling align closely with the sectors targeted by the proposed financial assistance program.

Industry Implications

The government's plan to offer financial aid to scrap processing facilities could have far-reaching effects on the industry:

• Capacity Expansion: Financial support may enable existing players like Gravita India to expand their processing capacities.
• Technological Upgrades: Companies might invest in advanced technologies to improve efficiency and meet higher environmental standards.
• New Entrants: The financial assistance could attract new players to the scrap processing sector, potentially increasing competition.
• Supply Chain Improvements: Enhanced processing capabilities could lead to better collection and handling of scrap materials across the value chain.

While the specific details of the financial assistance plan are yet to be disclosed, this development signals the government's commitment to supporting and growing the scrap processing industry in India. Investors and industry observers will be keenly watching how companies like Gravita India position themselves to leverage this opportunity.

As more details emerge about the government's financial assistance plan, it will become clearer how Gravita India and other players in the scrap processing sector stand to benefit. Stakeholders are advised to keep a close watch on further announcements and the company's strategic responses to this development.